State cuts pay for fairgrounds employees

DEL MAR — Despite record-breaking attendance at the San Diego County Fair and opening day at the race track, employees of the Del Mar Fairgrounds were forced to take a pay cut last month.

Approximately 185 full-time workers, including management, were issued a 4.62 percent salary reduction, effective July 1, three days before the end of the annual fair that ran a record 24 days this year.

“There are concerns with staffing and morale,” Manager Tim Fennell told the board of directors at the Aug. 14 meeting of the 22nd District Agricultural Association, which operates the state-owned fairgrounds.

It’s very difficult to have success year after year and break records and then tell employees you can’t give them a pay raise and now you have to cut their pay, Fennell said.

“I’m starting to see some cracks in the concrete,” he added, referring to the confidence and commitment of some workers.

According to a letter from the California Department of Human Resources, the pay reduction, effective through June 30, 2013, is an effort to “assist in achieving 2012-2013 Budget Savings.”

But cutting the pay of fairgrounds employees does nothing to help reduce the state budget deficit, Fennell said.

The 22nd DAA is a financially self-sustaining entity. It doesn’t send funds to Sacramento. Money from the 350-plus events at the site is used for operating costs, including payroll.

“We’re not part of the state’s general fund,” Fennell said. “We produce all our own revenue. We could disappear tomorrow and it wouldn’t affect one iota of the state budget.”

However, even though their paychecks come from the ag district, full-time workers with benefits are considered state employees, requiring them to follow state rules.

Director Russ Penniman said the 22nd DAA has tried to use internal funds to better compensate its workers but “every time we try … we get cut off at the pass.”

“We don’t have the latitude to do that,” he said. “We need a solution. … We still do the same amount of events. We have to staff them. Someone has to do the work. This policy is a net negative.”

Last year the fairgrounds was criticized for improperly allowing its employees to cash out accrued leave hours, such as unused vacation pay, which they would have received if they quit.

Seasonal and part-time workers are not subject to the pay reduction, nor are people who work for subcontractors, such as golf center and food and beverage employees.

If we can do that for certain areas, why can’t we do it for the entire fairgrounds? Director David Watson asked.

He suggested possibly creating a private entity from which the fairgrounds could draw its employees, thereby eliminating the mandate that they follow state worker guidelines.

He likened it to the structure of the San Diego Zoo, which is owned by the city but run by a privately operated nonprofit organization.

Otherwise it will require a legislative fix to change state law, Watson said.

Board members also discussed bringing back incentive and bonus programs for employees.

Board President Adam Day said he was looking into what options the 22nd DAA has. “As much sympathy as I have for the state, we’ve got to look inward for more local control,” Day said.

He also said he didn’t want to limit the options to those outside of the system. He said he would travel to Sacramento to see what policy alternatives the state can provide “to protect our employees.”

According to a scenario included in the August agenda, “Joe the Plumber” working for the fairgrounds, making $47,000 in 2000, should now, keeping up with inflation, be receiving an annual salary of $65,000.

But with mandatory pay cuts and furloughs, “Joe” is currently being paid about $43,780 annually.